Tag: slashing

Apple’s latest iPhone models are facing huge discounts in China as retailers try to sell the struggling devices. That comes as the top-of-the-line Apple smartphones have posted poor China sales on what experts say are too-high prices for the world’s largest smartphone market and a lack of innovative features compared to local competitors like Huawei. Other third-party sellers on the site had the devices for even cheaper, offering flash sales to try to unload iPhones. Sunion, an Apple re-seller,

That comes as the top-of-the-line Apple smartphones have posted poor China sales on what experts say are too-high prices for the world’s largest smartphone market and a lack of innovative features compared to local competitors like Huawei. The technology giant itself acknowledged earlier this month that unexpectedly low sales in the Chinese market would likely lead to worse-than-anticipated first quarter revenues.

One of the most recent iPhone cost cuts in the country came from Suning, a large Chinese retailer, which changed the price of the 128GB version of the iPhone XR from 6,999 yuan ($1,036) to 5,799 yuan ($858) — a 1,200 yuan ($178) discount.

Other third-party sellers on the site had the devices for even cheaper, offering flash sales to try to unload iPhones. One seller had a 256GB version of the iPhone XS Max, Apple’s most premium device, for 9,699 yuan ($1,436), way below the U.S. firm’s official selling price of 10,999 yuan ($1,628) for that smartphone.

Still, that remains more expensive than in the U.S., where the same phone would sell for $1,249, according to the Apple website.

And that’s just on one site. Other retailers in China are also putting their iPhones on sale. Sunion, an Apple re-seller, was advertising 700 yuan off for both the 128GB and 256GB versions of the iPhone XR. E-commerce site Pinduoduo, which allows third-parties to sell products, also had hefty discounts across all of the latest iPhone models.

Apple’s issues in China are down to two major factors, experts and local consumers say: It got its pricing wrong, and it has failed to introduce features to excite consumers in a forward-thinking technology market. Now, analysts said, competitors have taken market share in the premium smartphone space.

Saudi Arabia is slashing shipments of crude to the United States, a move that appears calibrated to boost oil prices after a swift and punishing sell-off. The firm’s loading estimate suggests that U.S. imports of Saudi crude oil could soon fall toward the lowest levels on record. Sending fewer barrels to the United States means U.S. crude stockpiles are more likely to drop, and shrinking inventories tend to push up oil prices. The maneuver shows how Saudi Arabia’s efforts to manage the oil marke

Saudi Arabia is slashing shipments of crude to the United States, a move that appears calibrated to boost oil prices after a swift and punishing sell-off.

The move could put the kingdom at loggerheads with President Donald Trump, who wants to drive down energy costs for Americans and frequently accuses the Saudi-led OPEC cartel of jacking up oil prices.

The Saudis are loading fewer barrels on ships bound for the United States this month, continuing a trend that began in September, according to an analysis by tanker-tracking firm ClipperData. The firm’s loading estimate suggests that U.S. imports of Saudi crude oil could soon fall toward the lowest levels on record.

Sending fewer barrels to the United States means U.S. crude stockpiles are more likely to drop, and shrinking inventories tend to push up oil prices. It’s a tactic the Saudis used last year to amplify their main strategy for draining a global crude glut and propping up the market: cutting output alongside fellow OPEC members, Russia and several other producers.

The maneuver shows how Saudi Arabia’s efforts to manage the oil market have evolved. During the 2014-2016 oil price crash, traders closely monitored weekly U.S. stockpile data to see whether oversupply was shrinking or growing. As the world’s biggest exporter, Saudi Arabia realized it could nudge the data in a direction that boosts the cost of crude.

“It worked so well in 2017 for [the Saudis] to cut flows to the U.S. because people could see the inventories dropping because U.S. data is so timely and transparent,” said Matt Smith, head of commodities research at ClipperData.

“The markets have become more transparent through tanker tracking,” Smith said. “You can see those changes being implemented more, and [the Saudis are] aware of that.”

November’s drop in Saudi barrels bound for the United States follows a six-week oil market rout that saw prices plunge 25 percent into bear market territory. It also comes after Saudi Energy Minister Khalid al-Falih warned on Monday that OPEC, Russia and several other producers may soon launch a fresh round of price-boosting output cuts.

Shortly after Falih issued the warning, Trump took to Twitter to voice his disapproval with that plan.

But Saudi Arabia may not be swayed by Trump’s pressure campaign. In recent days, Smith and other energy analysts have claimed that Trump essentially duped OPEC and its allies into raising output earlier this year.

The analysts say Trump’s threats to impose harsh sanctions on Iran, OPEC’s third-biggest producer, played a part in convincing the producers to stop capping output and start pumping more oil. But Trump ultimately allowed some of Iran’s biggest customers to keep importing its oil, which meant the oil squeeze the alliance feared never materialized.

Consequently, the producers put even more oil into a market that is swinging toward oversupply, giving traders another reason to sell off crude futures and push prices lower.

General Electric just slashed its dividend to a penny — Here’s what four experts think about the stock now 2 Hours Ago | 03:06It’s looking dim for shares of GE. Here’s how four market experts are trading the move:· Jack DeGan of Habor Advisory says that although the dividend cut was a necessary decision for the company, many of its investors will pay the price. “The street is not willing to wait for the 2 to 3 years for Mr Flannery’s plan to unfold. “Retail investors really should not be owning

General Electric just slashed its dividend to a penny — Here’s what four experts think about the stock now 2 Hours Ago | 03:06

It’s looking dim for shares of GE.

The former industrial giant hit its lowest level in a nearly decade on Tuesday – briefly breaking below $10 – after the company cut its dividend to just one cent per share.

Here’s how four market experts are trading the move:

· Jack DeGan of Habor Advisory says that although the dividend cut was a necessary decision for the company, many of its investors will pay the price. “The street is not willing to wait for the 2 to 3 years for Mr Flannery’s plan to unfold. That’s just too long of a horizon for most investors to be patient,” he explained. “There are [a] very large percentage of shares owned by retired employees and individuals [that] were relying on the dividends.”

· Stephanie Link, Head of Global Equities Research at Nuveen believes that even though the stock has been under significant pressure it still has potential for a turnaround. “It trades at ten multiple and okay fine if you think those numbers have to come down,” she said.” “It’s still at a really reasonable valuation and you’ve got this leadership that is actually putting a game plan in place.”

· Josh Brown, CEO and Co-founder of Ritholtz Wealth Management, warns that from a technical perspective there’s no reason why individual investors should be buying General Electric. “This is a stock that on the charts has shown you absolutely no indication that it’s turning,” he explained. “There has never been any indication that the downtrend, which is now years, is showing any fatigue.”

· John Inch, Analyst at Gordon Haskett, says that GE’s tie up with the SEC and nearly tapped out dividend suggest more problems could unfold in the future. “Retail investors really should not be owning a name that is under accounting investigation and the company took an equity capital raise off the table,” he warned. “We think GE Capital is going to owe billions of dollars more in the future, we’re just starting to see the covers start to unravel here.”

Bottom Line: GE has a number of critical issues to work through before it looks attractive again. Investors should steer clear of the stock for the time being.

Sealed Air shares fell after the bubble wrap manufacturer previewed disappointing third-quarter earnings and slashed its full-year profit outlook on Wednesday. The company said it expects third-quarter earnings per share between 60 cents and 61 cents. For the full year, Sealed Air said it now expects earnings between $2.40 and $2.45 per share, compared to the $2.45 to $2.55 range it had expected earlier. Shares of Sealed Air slipped 6 percent in after-hours trading. Sealed Air will release its o

The company said it expects third-quarter earnings per share between 60 cents and 61 cents. Analysts had expected earnings of 66 cents per share, according to a Refinitiv consensus estimate.

CEO Ted Doheny said in a statement that higher raw material and freight costs, along with foreign exchange pressures, impacted profitability.

For the full year, Sealed Air said it now expects earnings between $2.40 and $2.45 per share, compared to the $2.45 to $2.55 range it had expected earlier. Analysts had forecast full-year earnings of $2.53 per share, according to a Refinitiv consensus estimate.

Shares of Sealed Air slipped 6 percent in after-hours trading. As of the Wednesday close, the stock had already fallen 20 percent in the past 12 months.

Sealed Air will release its official third-quarter earnings results before the bell on Nov. 1.

L Brands, the parent of Victoria’s Secret and Bath & Body Works, on Wednesday lowered its profit outlook, which overshadowed quarterly earnings and revenue that topped analysts’ expectations. For the third quarter, L Brands said it expects earnings per share between 0 cents and 5 cents. Excluding items, L Brands earned 36 cents per share, better than the 34 cents per share expected by analysts surveyed by Thomson Reuters. Comparable sales at Victoria’s Secret declined 1 percent in the second qua

The company earlier this month reported net sales of $2.98 billion for second quarter, up from $2.76 billion the same period a year prior.

Comparable sales at Victoria’s Secret declined 1 percent in the second quarter, while they grew 10 percent for Bath & Body Works. On a whole, comparable sales grew 3 percent.

The age-old lingerie player has struggled under the pressure of new competition from millennial-focused brands like American Eagle’s Aerie division, Adore Me and ThirdLove. Those brands have the products that experts say today’s consumer wants: trendy, comfortable bralettes over the push-up bras for which Victoria’s Secret has become known.

“The dark store environment, the conspicuous sexuality of the offer, and the brash marketing are increasingly out of step with what modern consumers want,” GlobalData Retail managing director Neil Saunders has said about the brand.

In July, Victoria’s Secret sent its stocks tumbling when it announced that weak sales during semi-annual sale forced it to extend the event by two weeks and offer steeper discounts.

“We believe this all means the brand is broken,” wrote Jefferies analyst Randal Konik at the time.

”Tesla is going to be profitable and cash flow positive,” Mr. Musk said. Good financial results would be bad news for the hedge funds betting Tesla will fail, and serve as vindication for Mr. Musk. And Tesla’s financial position will have a significant impact on any potential effort to take Tesla private. ”Those are not necessarily the best for the long-term growth of the company,” Mr. Sacconaghi said. Further complicating Tesla’s financial future is a Securities and Exchange Commission inqu

As questions swirl about whether Tesla will go private — and the well-being of its chief executive, Elon Musk — one crucial factor looms large over the fate of the electric car company: Tesla’s own financial health.

The company has undertaken drastic measures as it seeks profitability, cutting costs and even erecting a tent-covered third assembly line at its manufacturing plant. But many of those tactics may not be sustainable for long, and some could even hurt the company down the road.

The state of Tesla’s balance sheet, and particularly its near-term cash position, are important to the company’s future, perhaps even more so since Mr. Musk’s surprise declaration on Aug. 7 that he would explore taking the company private.

In an emotional interview with The New York Times last week in which he discussed the ”excruciating” year he has had, Mr. Musk said Tesla would soon be in the black.

”Tesla is going to be profitable and cash flow positive,” Mr. Musk said. ”From a Tesla standpoint, I think it is a good place.”

His remarks echo what he said on the company’s most recent earnings call, when he predicted the company would turn a profit in the next quarter.

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Mr. Musk is under intense pressure from Wall Street to make good on that promise, and Tesla has been plagued by manufacturing issues while ramping up production of its mass-market Model 3.

Meanwhile, short-sellers continue to target the stock, injecting a destabilizing element to the company’s share price. Good financial results would be bad news for the hedge funds betting Tesla will fail, and serve as vindication for Mr. Musk.

And Tesla’s financial position will have a significant impact on any potential effort to take Tesla private. Investors evaluating a potential take-private deal will be assessing not only Tesla’s long-term prospects, but its current cash on hand and debts.

To achieve that profitability, Tesla is scrambling to slash spending in almost all areas of it operations.

In June, it announced it would lay off about 3,500 employees, about 9 percent of its work force, in a cost-cutting move. It has approached some suppliers about refunding some money Tesla has paid for projects that are still underway.

Tesla has said it is working to reduce costs by delivering completed vehicles faster. At the end of second quarter, it held inventory valued at $579 million, a figure the company said was ”a substantial increase” from previous quarters.

And Tesla has even more drastic cost cutting plans in store. It has said it plans to cut capital expenditures by a fourth this year — to about $2.5 billion from $3.4 billion in 2017.

”There are a lot of levers they are pulling to be cash-flow neutral or positive in the second half, but there’s trade-offs,” said Toni Sacconaghi of Sanford C. Bernstein.

Tesla declined to comment for this story.

But while analysts say Tesla may very well achieve profitability soon, the spending cuts necessary to do so could be costly, delaying the introduction of new models that could help boost revenues.

”Those are not necessarily the best for the long-term growth of the company,” Mr. Sacconaghi said. ”Cutting back on capex is not sustainable,” he said, referring to capital expenditures. ”Cutting inventories is not sustainable.”

What’s more, Tesla’s push to conserve cash will soon be complicated by two bond payments that come due in the next several months.

It is scheduled to pay off a $230 million convertible bond in November, and a payment of $920 million on a second convertible bond is due next February. Tesla could pay the second bond in stock instead of cash, if its share price is above $360. It has traded above that level in recent weeks, but on Friday it closed at $305.50.

Tesla has slipped into financial difficulties, in part because of how much cash it has been using up — nearly $1 billion every three months. It ended the second quarter with $2.2 billion, down from $3.3 billion at the beginning of the year.

The company’s precarious cash position prompted Moody’s Investors Service to downgrade Tesla’s debt in March, citing ”the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall.”

Mr. Musk has said no such capital raise would be necessary, because Tesla will soon be profitable. But Bruce Clark of Moody’s said he still expected the company may have to tap the capital markets.

”The company has made some important progress with the Model 3 production and has reduced capital expenditures, but I still think they are going to need additional capital,” Mr. Clark said. ”It’s not as tight as it had been, but they have to stay on the track they’ve been on recently.”

Mr. Musk has said that the production issues that bedeviled Tesla earlier this year are being resolved.

In June, the company hastily built an assembly line in a gigantic tent outside the walls of its plant in Fremont, Calif., in an effort to speed up production of the Model 3. That extra assembly line — along with the removing of bottlenecks in the two indoor lines — has enabled Tesla to put the output level to 5,000 per week, up from fewer than 3,000 cars per week in May.

Those gains have required round-the-clock production, however, which may not be possible for Tesla to sustain. Other automakers have found 24-hour production is untenable in the long run because workers become burned out and machinery tends to break down more frequently.

Further complicating Tesla’s financial future is a Securities and Exchange Commission inquiry into Mr. Musk’s tweet announcing that he was considering taking the company private. The commission is expected to begin meeting with Tesla executives this week.

To deal with the investigation, the Tesla board and the special committee of the board evaluating a potential buyout, have each retained law firms. Additionally, the special committee has retained a crisis communications firm, and other public relations firms are angling for assignments.

Those legal fees will add up, and the threat of lengthy legal proceedings could also complicate Tesla’s efforts to raise more cash should it need to.

Early Sunday morning, Mr. Musk took to Twitter and reminded his followers just how hard he is working as he struggles to make Tesla profitable.

Responding to a post from Arianna Huffington, the Huffington Post founder and member of Uber’s board of directors, who suggested he take a vacation and focus on his physical and mental health, Mr. Musk said: ”I just got home from the factory. You think this is an option. It is not.”

E-Trade Financial offers commission-free trading on more than 250 ETFs. “Both already have commission-free trading for their own ETFs as well as some other issuers.” Charles Schwab was an early leader with 200-plus commission free ETFs, including its own ETFs and many ETFs from other major providers. Vanguard is making a greater play for the online brokerage business and noted in their release that it has made “considerable enhancements” to its brokerage platform over the past several years. Sim

“The ETF price war has been escalating and spreading to all corners. This is the latest salvo by Vanguard, one of the low-cost leaders in the ETF space, aimed at attracting new clients and then offering them other services, where they can make more money. It is a big development in the ETF price war,” said Neena Mishra, director of ETF research at Zacks Investment Research.

Mishra does believe competitors will make moves in response and soon. But Vanguard also has an advantage in that it is an asset manager first and brokerage business second. Its business model relies less on brokerage revenue than stickiness of fund assets.

“Vanguard is more an asset manager that offers a smaller platform for trades to occur, whereas other firms profit more from the assets on and the trades via a brokerage platform. By moving to commission free for all, a brokerage firm forgoes some revenue in exchange for stickier assets,” Rosenbluth said.

E-Trade Financial offers commission-free trading on more than 250 ETFs. TD Ameritrade offers commission-free access to more than 300 ETFs.

Both Fidelity and Schwab have scale benefits of being both an asset manager and a brokerage platform for trading ETFs, Rosenbluth noted, but he could not speculate on how they would respond.

“Schwab and Fidelity are more likely to come up with similar moves,” Mishra said. “Both already have commission-free trading for their own ETFs as well as some other issuers.”

Charles Schwab was an early leader with 200-plus commission free ETFs, including its own ETFs and many ETFs from other major providers. Fidelity has 95 (its own and many iShares ETFs). “Both are likely to expand these platforms soon,” Mishra said.

Vanguard is making a greater play for the online brokerage business and noted in their release that it has made “considerable enhancements” to its brokerage platform over the past several years.

While the move is a win for investors, it is also important for investors not to place all the emphasis on trading fees, especially as the fee wars at the level of the individual ETF and trading platform will continue. Similar ETFs in asset class or theme still vary in stock selection, liquidity and trading costs, among other factors. But it is hard to argue with what investors are telling these ETF companies.

According to a recent annual Schwab ETF survey, 45 percent of millennial and 39 percent of Gen X investors surveyed say commission-free ETFs are most important and they’d move their account to a firm that offered commission-free.

“CFRA thinks investors need to go beyond what ETFs trade commission-free on certain platforms, but we acknowledge this is a priority for many,” Rosenbluth said.

There is also a risk it becomes too easy and cheap to trade ETFs, something index fund creator and Vanguard founder Jack Bogle has remarked on repeatedly. “Recent fund flows clearly show that investors are becoming more cost conscious and moving their dollars to the cheapest ETFs. And while there is no doubt that investors are big winners as the fee war escalates, the downside is that the ease of trading and low transaction costs are also leading investors to trade more often, particularly in volatile markets,” Mishra said.

Carnival shares dropped Monday after the company cut its full-year guidance, citing increased fuel costs and unfavorable currency exchange rates. The Miami-based company said it expects rising fuel prices will lower its full-year earnings per share by 19 cents. Other cruise line stocks felt pressure after Carnival’s earnings report as well, with Norwegian Cruise Line falling 7.2 percent and Royal Caribbean Cruises down 5.1 percent. Carnival also reported adjusted earnings for fiscal second quart

The stock closed down 7.85 percent at $58.54 per share, the largest decline since a 7.9 percent drop in February 2016, after the cruise line operator cut its full-year earnings outlook to a range between $4.15 and $4.25 from a range between $4.20 and $4.40 earnings. The Miami-based company said it expects rising fuel prices will lower its full-year earnings per share by 19 cents.

CEO Arnold Donald assured CNBC’s “Closing Bell” that the drop in guidance was based entirely on rising fuel costs, saying that the company would be working hard to offset them.

In the quarterly conference call, Donald also said that, despite the forecast cut, “we continue to have strong operating performance despite the impact of fueling currency.”

“Essentially, strength and underlying demand for our cruise offerings plus greater ticket prices year-to-date … more than offset the unfavorable impact of fuel and currency for the full year compared to our December guidance,” Donald said.

The company also expects its third-quarter profit to range from $2.25 to $2.29 per share, well below a Thomson Reuters estimate of $2.47.

Other cruise line stocks felt pressure after Carnival’s earnings report as well, with Norwegian Cruise Line falling 7.2 percent and Royal Caribbean Cruises down 5.1 percent.

Carnival also reported adjusted earnings for fiscal second quarter beat estimates at 68 cents per share, above the Reuters estimated 60 cents. Revenue for the quarter was $4.4 billion versus the expected $4.32 billion, fed by booking volumes at above levels from the prior year.

The company’s stock was already under pressure prior to Monday’s drop, having fallen 4.3 percent this year through Friday’s close.

Tax relief for the middle class is the “heart” of the Republican tax plan expected to become law in the coming days, President Donald Trump said Wednesday. Moments after touting middle-class benefits, however, Trump noted that slashing the corporate tax rate is “probably the biggest factor” in the GOP legislation. “Our plan also lowers the tax on American business from 35 percent all the way down to 21 percent. That’s probably the biggest factor in this plan,” he said at a Cabinet meeting. Our c

Tax relief for the middle class is the “heart” of the Republican tax plan expected to become law in the coming days, President Donald Trump said Wednesday.

Moments after touting middle-class benefits, however, Trump noted that slashing the corporate tax rate is “probably the biggest factor” in the GOP legislation.

“Our plan also lowers the tax on American business from 35 percent all the way down to 21 percent. That’s probably the biggest factor in this plan,” he said at a Cabinet meeting. “We’ve become competitive all over the world. Our companies won’t be leaving our country any longer because our tax burden is so high.”